Directional Movement Indicator (DMI)
The Directional Movement Indicator (DMI) was authored by J. Welles Wilder in 1978. DMI (also known as direction movement index) is a valuable tool for assessing price direction and strength. It is composed of two indicators, the positive directional indicator (+DMI) and the negative directional indicator (-DMI). The user may change only the period length. This indicator’s definition is further expressed in the condensed code given in the calculation below.
How To Trade Using Directional Movement Indicator (DMI)
The Directional Movement Indicator (DMI) may be used in conjuction with other studies. No signals are calculated for this indicator.
How To Access in MotiveWave
Go to the top menu, choose Study>Welles Wilder>Directional Movement Indicator (DMI)
or go to the top menu, choose Add Study, start typing in this study name until you see it appear in the list, click on the study name, click OK.
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//period = user defined, default is 14
//index = current bar number
//smma = smoothed moving average
//abs = absolute value
// Calculate the +DM, -DM and TR pDM = getPositiveDM(index); nDM = getNegativeDM(index); tr = getTrueRange(index); // Calculate the Average +DM, -DM and TR PDMa = smma(index, period, PDM); NDMa = smma(index, period, NDM); TRa = smma(index, period, TR); // Determine the +DI, -DI and DX Plot1: pDI = PDMa / TRa * 100; Plot2: nDI = NDMa / TRa * 100; DX = Math.abs((PDMa - NDMa)) / (PDMa + NDMa) * 100;